Partly allowed

M/S Eih Limited v. Bruhat Bangalore Mahanagara Palike

Karnataka HC16 Dec 2024WP/33801/2024

Case brief

AI extract

What is this about?

Property tax assessment dispute: the petitioner challenged a demand order requiring payment of tax for 2008-09 to 2023-24 after a prior assessment was cancelled without notice. The court declared the cancellation void for breach of natural justice and read down the demand as a fresh show-cause notice with opportunity to respond within four weeks.

What did the court decide?

Impugned order dated 26.07.2024 read down as notice under S.108A(11) KMC Act and S.144(15) BBMP Act; order dated 27.11.2020 declared void; petitioner permitted to file response within four weeks.

M/S Eih Limited Vs Bruhat Bangalore Mahanagara… — Municipal and Town Planning | Karnataka HC (2024)

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16^TH DAY OF DECEMBER, 2024 BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 33801 OF 2024 (LB-BMP)

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BETWEEN:

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M/S EIH LIMITED (FORMERLY KNOWN AS M/S EAST INDIA HOTELS LIMITED) A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT N-806A, 8^TH FLOOR, DIAMOND HERITAGE BUILDING, 16 STRAND ROAD, FAIRLEY PLACE, KOLKATA, WEST BENGAL - 700 001.

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Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA

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ALSO HAVING ITS OFFICE AT NO.39, MG ROAD BENGALURU - 560001 REPRESENTED BY ITS AUTHORISED REPRESENTATIVE MR. SHAMIM REZA

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…PETITIONER

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(BY SRI.S.S. NAGANAND, SENIOR ADVOCATE FOR SRI. TAMARRA MAIRI.,ADVOCATE)

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AND:

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BRUHAT BANGALORE MAHANAGARA PALIKE THROUGH ITS COMMISSIONER MUNICIPAL CORPORATION (NEAR UNITY BUILDING)

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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N R SQUARE, BENGALURU - 560002.

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ZONAL COMMISSIONER EAST ZONE, BRUHAT BENGALURU MAHANAGARA PALIKE 10^TH FLOOR, PUBLIC UTILITY BUILDING, MG ROAD, BENGALURU KARNATAKA - 560 001.

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ASSISTANT REVENUE OFFICER BRUHAT BENGALURU MAHANAGARA PALIKE SHIVAJINAGAR ZONAL OFFICE, DISPENSARY ROAD, BENGALURU KARNATAKA - 560001.

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…RESPONDENTS

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(BY SRI.PAWAN KUMAR., ADVOCATE FOR R1 TO R3)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUITON OF INDIA PRAYING TO QUASH BY A WRIT OF CERTIORARI OR ANY OTHER WRIT, ORDER OR DIRECTION, THE IMPUGNED ORDER BEARING REFERENCE NUMBER VAA. AA(PURA) 225/2024-25 DATED 26.07.2024 ISSUED BY R-1 VIDE ANNX-B AS ILLEGAL, ARBITRARY AND UNSUSTAINABLE.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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ORAL ORDER

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The petitioner is aggrieved by the second respondent's Order dated 26.07.2024 [ Annexure-B ]. The second respondent, in issuing this impugned order under Section 108A[10] of the Karnataka Municipal Corporations Act, 1976 [for short, 'the KMC Act' ] and Section 144[12] of the Bruhat Bengaluru Mahanagara Palike Act, 2020 [for short, 'the BBMP Act' ], has informed the petitioner that:

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[a] if it proposes to avail the One Time Settlement [which has now expired], it will have to pay a sum of Rs.6,45,31,491/- as tax demand for the periods between 2008-09 and 2023-24, and

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[b] if it does not avail this benefit, must pay Rs.12,56,63,118/- as demand to the second respondent as part of the scrutiny assessment that is contemplated under Section 108A[10] of

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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the KMC Act and Section 144[12] of the BBMP Act.

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Sri S S Naganand, the learned Senior Counsel for the petitioner, submits that the petitioner's primary grounds for interference with the second respondent's impugned order are that:

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[a] there are scrutiny assessments for some of the years prior to 2018-19, and with the scrutiny assessment being completed for these years resulting in certain revision with the order dated 29.04.2019, the petitioner has answered the consequential demand and has also offered taxes even for the next years in terms of such revision,

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[b] the petitioner is informed that there is another scrutiny order under Section 108A[10] of the KMC Act on 27.11.2020 but the petitioner is not issued with

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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notice prior to such order or notice of

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the proceedings leading to such order,

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[d] the second respondent under Section 108A[10] of the KMC Act has cancelled the earlier order dated 29.04.2019 vide Order dated 27.11.2020 and that though the petitioner has raised contentions in this regard, the same is not considered.

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It is obvious from the afore submissions

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that the petitioner's grievance with the impugned order, apart from other grounds urged such as jurisdiction and the time limit, is essentially on the ground of lack of due opportunity especially with regard to the cancellation of the Order dated 29.04.2019 vide Order dated 27.11.2020. This Court must observe that if the earlier proceedings were completed on 29.04.2019 with the petitioner accepting the terms of such order, it was incumbent

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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upon the second respondent to ensure that the petitioner was informed about the proposal to revisit or cancel such order. This becomes clear on reading of the provisions of Section 108A[10] and [11] of the KMC Act which reads as under:

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"108A. Levy and calculation of property tax in respect of Bruhath Bangalore Mahanagara Palike -

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(10) Every return filed by an owner or occupier shall be deemed to have been assessed to tax except in cases where the Commissioner or authorized officer may take-up or authorize subordinate officers the cases for random scrutiny of the returns filed in the manner prescribed. Provided that Commissioner may suo moto or otherwise has reason to believe that there is an evasion of tax by the owner or occupier, he may cause inspection of such building and assess the tax.

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(11) For the purpose of random scrutiny of the return filed or in cases where returns are not filed as required under sub-section (8) in respect of any buildings or lands or

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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both, the Commissioner or any person authorized by him in this behalf may enter, inspect, survey or measure any land or building after giving notice to the owner or occupier and the owner or occupier shall be bound to furnish necessary information required and based on such inspection and information collected, he shall assess the property tax subject to sub-section (5) and send a copy of the order of assessment to the owner or occupier concerned. Such entry into and upon any building or vacant land shall be made between sunrise and sunset."

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The provisions of Section 144[15[c] of the BBMP Act

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also contemplate opportunity when there is reason for reassessment.

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There is nothing on record at this stage for this Court to infer reasonably that the petitioner is issued with notice of the proceedings leading to the order dated 29.04.2019 resulting in a revisit of the concluded aspects vide Order dated 27.11.2020. Sri Pawan Kumar, the learned counsel for the

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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respondents, is heard in the light of these submissions.

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This Court is of the considered view that for complete adjudication, the second respondent should reason, after due opportunity to the petitioner, why there must be a revisit of the Order dated 29.04.2019. The second respondent must further consider if there could be reasons for revisiting, is that revisit permissible given the other provisions of the concerned enactments on the time limits. Hence, there must be interference for enabling reconsideration.

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This Court, for the expedited decision, is of the view that the impugned order should be construed as notice of the second respondent's reason to revisit the revised order dated 29.04.2019 and the petitioner's response must be considered in the light of afore notwithstanding the order dated 27.11.2020 which must yield on the ground of

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violation of principles of natural justice. It will be needless to observe that all questions that could be raised in law by the petitioner as against the revisiting order dated 27.11.2020 and the assessment for the subsequent years are left open for due consideration in the light of the response that would be filed. As such, the following:

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ORDER

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[a] The petition is allowed in part.

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[b] The impugned order dated 26.07.2024 [ Annexure-B ] of the second respondent is read down to be notice as is contemplated under the provisions of Section 108A[11] of the KMC Act and under Section 144[15] of the BBMP Act for the relevant years with opportunity to the petitioner to show that the order dated 29.04.2019 cannot be revisited. The petitioner will be at liberty to file response once again within a period of

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10 -

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NC: 2024:KHC:51663 WP No. 33801 of 2024

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four [4] weeks from the date of receipt of a

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certified copy of this order.

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[c] The second respondent shall while considering the petitioner's response as now enabled, examine the merits of the revisiting order dated 29.04.2019 and all other aspects despite the order dated 27.11.2020 which is hereby declared as void being in violation of the principles of natural justice.

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Sd/ - (B M SHYAM PRASAD) JUDGE

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AN/-

M/S Eih Limited v. Bruhat Bangalore Mahanagara Palike

Case brief

What is this about?

What did the court decide?

M/S Eih Limited v. Bruhat Bangalore Mahanagara Palike

Case brief

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